Montgomery County may lose millions on sale of mental health facility

Selling off its mental health facility isn’t going to be profitable for Montgomery County as it was with the Joe Corley Detention Center.

After earning an estimated $22 million from the sale of the jail, the county might lose between $2 million and $4 million on the 100-bed Montgomery County Mental Health Treatment Facility. Still, both transactions could yield a surplus of approximately $18 million that county officials said they would previously earmark for future renovation and expansion of the Montgomery County Jail, located at 700 Hilbig Road in Conroe.

Constructed in 2008 at a cost of $33 million, the MCMHTF was appraised recently at $22 million, The Courier has learned.

The appraisal was conducted by Argianas & Associates, the same Chicago firm that appraised the Joe Corley facility at $42.2 million, although the county had established a minimum sale price of $55 million.

County Judge Alan B. Sadler said the MCMHTF will be a “negative” transaction.

“I knew it (the mental health facility appraisal) was going to be low,” Sadler said. “But I didn’t think it would be quite that low.”

Acceptance of the appraisal, and authorizing notification of the sale of the MCMHTF is on the agenda when Commissioners Court convenes 9:30 a.m. Monday on the fourth floor of the Alan B. Sadler Building, 501 N. Thompson in downtown Conroe.

While the appraised value is two-thirds of the MCMHTF’s construction cost might raise concern, the county has a safety net in The GEO Group Inc. Last month the world’s largest corrections company paid $65 million to acquire the 1,287-bed Joe Corley facility, even though the county’s minimum bid was $55 million and the jail’s appraised value was $44.2 million.

The county used $42 million from the sale to pay off its outstanding debt on the jail, leaving the county with an estimated profit of $22 million.

And although Montgomery County established $35 million as the minimum price for the MCMHTF, The GEO Group already has set the bar with an offer of the same amount.

“That offer is still on the table,” said Mark Bosma, county director of infrastructure.

Currently, the mental health facility’s outstanding debt is at $39 million. If GEO’s offer stands - and that appears likely since GEO was the lone bidder for the Joe Corley facility - that should trim the deficit.

Bosma said the sales process for the MCMHTF will “mirror” the one used for the Joe Corley facility. The county will accept sealed bid requests for proposal.

GEO Care, a subsidiary of The GEO Group, has managed and operated the MCMHTF since it opened in 2008. The facility provides mental health management and treatment services for civil, forensic and special-needs psychiatric patient populations.